From Remnant To Riches: What The Quest For Premium Inventory Means For The Industry

The recent flurry of ad-tech acquisition deals clearly demonstrates that the industry is shifting its focus to developing solutions that support premium inventory. While all the attention has traditionally been around solving for RTB and the programmatic trading of low-value, non-guaranteed inventory, things are changing.

Today, it’s about going where the money is, and that means bringing equilibrium with the shift to premium. There’s a huge opportunity right now to take non-digital spend into digital, with the right technology to support brand advertising on premiuminventory.

And just what is at stake? Advertisers will spend nearly $600 billion globally this year, and only $170.5 billion of that in digital (eMarketer). The majority will be brand-focused; the real opportunity is tapping into this spend.

In digital, brands are in search of safe, brand-friendly environments where they’re associated with other high-quality brands, not simply direct-response advertisers; premiuminventory provides exactly this for them.

Sweetening the pot are larger, impactful and more visually attractive ad formats (think IAB Rising Stars) — which are now available — and the emergence of the sorts of metrics that brands find appealing. Measurement has long been a thorn in the industry’s side, with brands forced to accept the same metrics used for reporting by direct-response marketers. We’ve known for several years that CTR (click-thru rate) is entirely the wrong metric for digital, yet it has continued to dominate what’s offered to brands.

No more.

We now have more meaningful metrics designed to appeal to brands: in-view rate and in-view time; universal interaction rate; interaction times, etc.

That quality environment and experience is increasingly winning brand spend over from non-digital, yet the industry is still missing out on opportunities in a few key areas. Nielsen’s research in conjunction with the CMO Council last year revealed significantly more brand campaigns were being run than traditional direct-response campaigns, and uncovered an increase in spend on branding. However, increasing purchasing efficiency was a key factor highlighted in the report that would persuade them to move budget to digital.

Now that the right environments and measurements exist for brands, the technology is getting there as well. The importance of supporting premium inventory with improved workflows, and making the purchase of it quicker and more efficient, are now being realized. An emerging way to make buying digital easier — and remove complexities — is to tackle the growing desire for fewer vendors, integrations and user interfaces. Advertisers want the ability to purchase quickly and easily, for both non-guaranteed and guaranteed inventory, and we now increasingly have the technology to apply programmatic trading to premiuminventory.

Rubicon scooped up several companies at the end of last year, enhancing their ability to deal in premium direct. AppNexus has also made a host of acquisitions in areas such as viewability, ad serving and, most recently, forecasting.

Adobe, Oracle, Facebook, AppNexus and other major players are building out their tech stacks to appeal to all elements of the advertising food chain, but it’s no longer about premium versus remnantinventory at all. Rather, the focus now is on bringing them together to increase overall yields for the publisher.

Sure, there are questions about whether a reputation as a player in the remnant space might hinder a tech company’s ability to move into premium. Will premium publishers see you as someone who can help, or is that historical low-value focus going to be a hindrance? That remains to be seen, but what we are seeing now are a host of big players making their moves, laying the groundwork for the rest of the industry to follow suit.

In Europe, premium publishers are joining forces for increased reach, scale and control. The Pangaea Alliance has CNN International, The Guardian, Financial Times, Reuters and The Economist providing access to their respective inventories, as well. The AOP (Association of Online Publishers) premium publisher alliance, for example, brings together TIME, Telegraph Media Group, Haymarket Media Group and more. By partnering, they’re able to offer greater scale (which can be challenging in European markets), more engaging, larger, advanced ad formats, access to a premium audience and, of course, a quality environment — everything that appeals to brands.

Clearly, strategic partnerships, collaboration and acquisition are the way forward. The ad-tech industry shakeout will continue throughout 2015, as the emphasis on making premium buying and selling as simple and automated as possible grows. The result? Increasingly, solutions that begin to solve for the specific needs of brands.